Roemer v. Retail Credit Co.

44 Cal. App. 3d 926, 119 Cal. Rptr. 82, 1975 Cal. App. LEXIS 985
CourtCalifornia Court of Appeal
DecidedJanuary 29, 1975
DocketCiv. 30888
StatusPublished
Cited by73 cases

This text of 44 Cal. App. 3d 926 (Roemer v. Retail Credit Co.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Roemer v. Retail Credit Co., 44 Cal. App. 3d 926, 119 Cal. Rptr. 82, 1975 Cal. App. LEXIS 985 (Cal. Ct. App. 1975).

Opinion

Opinion

KANE, J.

Defendant Retail Credit Company appeals for the second time from a jury verdict finding it guilty of libel and awarding plaintiff Paul Roemer, Jr., both compensatory and punitive damages. Judgment for plaintiff at the first trial of this action was reversed because of an erroneous instruction pertaining to the subject of malice (Roemer v. Retail Credit Co. (1970) 3 Cal.App.3d 368 [83 Cal.Rptr. 540].)

Mr. Roemer is a licensed insurance broker. Defendant is a mercantile agency engaged in the business of providing commercial investigative reports to subscribers—many of whom are insurance underwriters who request such reports in determining whether to license applicant brokers with their companies.

*931 Plaintiff commenced this action in 1965 after discovering that defendant had prepared and submitted investigative reports about him to four insurance companies. Falsity of the reports was admitted by defendant (Roemer, supra, p. 370). At both trials of the case, the sole defense was that of the qualified privilege provided by Civil Code, section 47, subdivision 3. 1

On this appeal defendant contends that: 1) the award of punitive damages must be set aside because (a) the jury was erroneously instructed as to the standard of proof required to establish actual malice and (b) the evidence (regardless of the standard of proof) does not support the jury’s finding of malice. As an alternative contention on this subject, defendant claims that the jury’s award of $250,000 punitive damages was grossly excessive as a matter of law; 2) the trial court erred in denying defendant’s request for leave to amend its answer to plead partial truth in mitigation of damages and in rejecting defendant’s proposed instruction on the same subject; and 3) plaintiff’s counsel was guilty of prejudicial misconduct. For reasons which shall appear, none of these contentions can be sustained. Accordingly, we affirm the judgment.

Punitive Damages—Malice—Quantum of Proof

Since defendant is a mercantile agency to which the qualified privilege extends (Roemer, supra, p. 370; Stationers Corp. v. Dun & Bradstreet, Inc. (1965) 62 Cal.2d 412, 418 [42 Cal.Rptr. 449, 398 P.2d 785]), the judgment against it can be sustained only if the jury’s finding of malice is supported by the appropriate quantum of evidence.

Before evaluating the evidence; therefore, we must first determine what standard of proof of malice is required in state private defamation actions.

Defendant, predicating its argument on the First Amendment principles enunciated in New York Times Co. v. Sullivan (1964) 376 U.S. 254 [11 L.Ed.2d 686, 84 S.Ct. 710, 95 A.L.R.2d 1412], and more recently articulated in Gertz v. Robert Welch, Inc. (1974) 418 U.S. 323 [41 L.Ed.2d 789, 94 S.Ct. 2997], urges us to hold that the element of malice must be *932 proven by clear and convincing evidence. Since the jury was instructed in the court below in terms of preponderance of evidence, defendant argues that we must reverse. We disagree with defendant’s basic premise as to the standard of proof in a case such as this. Accordingly, we conclude that the jury was properly instructed. 2

While Gertz does hold that a private defamation plaintiff may recover punitive damages only if he sustains the standard of proof required by New York Times (p. 350 [41 L.Ed.2d p. 811, 94 S.Ct. p. 3012]), the case as a whole makes it unmistakable that this rule obtains only where the protection of First Amendment freedoms is at stake. The court in Gertz emphatically points out that the individual’s right to the protection of his own good name is a basic concept of human dignity which is at the root of any system of ordered liberty. As a consequence, the protection of private personality, like the protection of life itself, is a legitimate state interest. 3 The decision in Gertz that, despite this crucial state interest, the press should be held liable for libelous statements only under a more stringent standard of proof than that prescribed by state, law (i.e., plaintiff must show actual loss to recover compensatory damages and must prove actual malice by clear and convincing evidence to' be awarded punitive damages) is the result of balancing competing values and is predicated on a solicitous protection of the freedom of the press secured by the First Amendment. The Gertz court makes it clear indeed that the result reached therein is a compromise which is based on “the principle that debate on public issues should be uninhibited, robust, and wide-open” (New York Times Co. v. Sullivan, supra at pp. 270-271 [11 L.Ed.2d at pp. 700-701]), and on the premise that this standard of proof “administers an extremely powerful antidote to the inducement to media self-censorship” (Gertz v. Robert Welch, Inc., supra, 418 U.S. at p. 342 [41 L.Ed.2d at p. 807, 94 S.Ct. at p. 3008]).

*933 The decisive issue awaiting determination, therefore, is whether the credit report in dispute, as opposed to news media publications, is protected by the First Amendment calling for the higher standard in proving actual malice. For the reasons which follow, we hold that the libelous communication presented in a credit report falls outside the protective umbrella of the First Amendment; and, as a consequence, malice, a prerequisite to sustain punitive damages, may be proved under the conventional standard of preponderance of evidence.

In limine, we wish to point out that the precise question here raised has not, as yet, been definitively decided by the United States Supreme Court. On the contrary, Rosenbloom v. Metromedia (1971) 403 U.S. 29 [29 L.Ed.2d 296, 91 S.Ct. 1811] explicitly leaves this issue open. While in Rosenbloom the court reaffirms its commitment to bolster robust debate on public issues embodied in the First Amendment and extends constitutional protection to all discussion and communication involving matters of public or general concern, it intimates “no view on the extent of constitutional protection, if any, for purely commercial communications made in the course of business” (pp. 43-44, fn. 12 [29 L.Ed.2d p. 312]; italics added).

In resolving the issue, therefore, we take recourse to federal cases dealing with situations comparable with those presented in the case at bar. One of the cases in point is Kansas Electric Supply Co. v. Dun & Bradstreet, Inc. (10th Cir.

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Cite This Page — Counsel Stack

Bluebook (online)
44 Cal. App. 3d 926, 119 Cal. Rptr. 82, 1975 Cal. App. LEXIS 985, Counsel Stack Legal Research, https://law.counselstack.com/opinion/roemer-v-retail-credit-co-calctapp-1975.